Reilly v. Segert

Prior to the enactment of the Business Corporation Act of 1933, it was settled that a shareholder of a corporation who sold his stock to the corporation while it was insolvent was liable to an injured creditor of the corporation for the amount paid to the shareholder for his stock. (Singer v. Hutchinson, 183 Ill. 606; Johnson v. Canfield-Swigart Co. 292 Ill. 101.) This liability was based upon the adverse effect of the transaction upon creditors, and not upon the guilt or innocence of the shareholder, who was held liable even though there was no evidence of fraud. (Clapp v. Peterson, 104 Ill.…